State Wastes More Than $300 Million, Contracting out

ALBANY, NY (05/03/2012)(readMedia)-- The New York State Public Employees Federation (PEF) today released its annual report on the high cost of contracting out work that could be done by state employees for far less. The report reveals the state increased spending on contracting out by more than $285 million while spending on state employee salaries decreased by $395 million.

"The state is in no position to waste millions," said PEF President Ken Brynien. "Yet that's exactly what is happening year after year as the state continues the costly practice of relying on outside contractors to do the work state employees can do for less, even when the cost of state employee benefits are included in the price.

"The average consultant cost the state $73.63 per hour last fiscal year, which is 40 percent more than it costs to pay state employees in comparable jobs. The state could save up to $316 million each year simply by replacing some consultants, such as information technology developers, designers and installers, bridge inspectors and accounting and auditing services.

"Significant savings could be achieved by comparing the costs before committing to consultant contracts, much the way each one of us compares costs in our daily lives whether shopping for groceries or a car,"?Brynien said.

PEF is calling on state legislators to pass cost-benefit analysis legislation (S3093/A5128-A) sponsored by Senator Joe Robach and Assemblyman Harry Bronson. The bill would simply require state agencies to do a cost comparison before awarding contracts, to determine if state employees could do the same work at a lower cost.

"We are well aware of the need for private consultants on short-term projects," Brynien added. "But continually contracting out for bridge inspectors, engineers, architects and information technology consultants is an insult to every taxpaying citizen of this state. It is a proven fact, this work can be done in-house by state employees at a much greater savings and it's high time we start taking advantage of these savings.

"The Cuomo administration has agreed to convene a joint committee as part of our current contract to discuss these issues. We are hopeful this joint committee will agree on measures to reduce unnecessary use of consultants and save the taxpayers millions," Brynien said.

PEF is the state's second-largest state-employee union, representing 54,000 professional, scientific and technical employees. This is the first of a series of reports PEF will release in coming weeks to document the state's wasteful contracting practices. Read the entire report, entitled Go Public.